Question

Consider the following sample data for the relationship between advertising budget and sales for Product A: Observation 1 2 3 4 5 6 7 8 9 10 Advertising ($) 40,000 50,000 50,000 60,000 70,000 70,000 80,000 80,000 90,000 100,000 Sales ($) 240,000 308,000 315,000 358,000 425,000 440,000 499,000 494,000 536,000 604,000 What is the predicted sales quantity for an advertising budget of $68,000? Please round your answer to the nearest integer. Note that the correct answer will be evaluated based on the full-precision result you would obtain using Excel.

Answer 1

You can see the above shown trend line in red colour which is produced in excel through linear regression. It gives the prediction of sales at advertising value of $68000 as $415897(nearest integer)

In cell A12 we have forecasted the value of sales at given advertising of $68000 by using formula "FORECAST".

ANSWER: Sales = $415897 at advertising of $68000.

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